{
  "id": 1756151,
  "name": "John D. TONEY, Sr. v. John T. HASKINS et al",
  "name_abbreviation": "Toney v. Haskins",
  "decision_date": "1980-11-19",
  "docket_number": "CA 80-222",
  "first_page": "190",
  "last_page": "197",
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      "reporter": "S.W.",
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      "cite": "270 Ark. 774",
      "category": "reporters:state",
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      "year": 1980,
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      "category": "reporters:state",
      "reporter": "Ark.",
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        1675923
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      "year": 1978,
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    {
      "cite": "248 Ark. 1182",
      "category": "reporters:state",
      "reporter": "Ark.",
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      "year": 1970,
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    {
      "cite": "257 Ark. 983",
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      "reporter": "Ark.",
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  "last_updated": "2023-07-14T21:22:30.070289+00:00",
  "provenance": {
    "date_added": "2019-08-29",
    "source": "Harvard",
    "batch": "2018"
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  "casebody": {
    "judges": [],
    "parties": [
      "John D. TONEY, Sr. v. John T. HASKINS et al"
    ],
    "opinions": [
      {
        "text": "David Newbern, Judge.\nThe procedural morass which gives rise to this appeal yields an issue which is easier to decide than the facts are to describe. Basically, the question presented is whether the appellant should have been allowed to present an equitable counterclaim which was closely related to the main action and which arose after the issues had been joined in the circuit court. We hold the counterclaim should have been allowed and the entire matter transferred to chancery, and thus the case is remanded for that purpose.\nIn May, 1977, the appellant Toney, a realtor, purchased land from Weinstein, another realtor. In June, 1977, Toney and Haskins entered an agreement whereby Haskins was to purchase the same land from Toney. In July, 1977, Haskins gave Toney a note and mortgage. A first mortgage had been executed in favor of a bank. The mortgage to Haskins was a second mortgage for the purchase price in excess of that which the bank had agreed to lend.\nIn December, 1978, Haskins filed a complaint in the circuit court alleging that he and Toney had a fiduciary relationship and that Toney had obtained secret profits in purchasing the land from Weinstein and selling it to Haskins.\nIn his answer, Toney denied existence of any fiduciary relationship with Haskins and asserted a counterclaim basically sounding in abuse of process. In that pleading, Toney mentioned the note from Haskins to him and asked for attorney\u2019s fees incident to defending the note. Haskins had not at that time failed to make any of his note payments to Toney.\nIn that same answer, Toney asserted a third party claim against one Roger Mears. Because it is not material to the outcome here, we will refrain from discussing that third party action except to say that it resulted in the filing of pleadings and motions and was ultimately dismissed with prejudice on March 27, 1980.\nOn March 28, 1980, Toney sought to supplement his answer to the original complaint by Haskins. He asserted a new counterclaim for foreclosure on the note, alleging Haskins had defaulted by failing to make a payment due July 31, 1979- In addition, Toney asserted third party claims against the other named appellees as persons having possible interests in the property subject to the mortgage. Along with this pleading, Toney moved to transfer the entire case to the chancery court, saying foreclosure could only be considered there and the initial claim was in the nature of an accounting which is also equitable in nature.\nOn April 18, 1980, the court entered an order which: (1) struck the foreclosure counterclaim from Toney\u2019s revised pleading on the bases that it was not \u201ctimely filed\u201d and violated Toney\u2019s election of remedies to sue at law on the note; (2) dismissed the third party aspects of the pleading because Toney had not sought leave of the court to file against third parties and because the court lacked jurisdiction to entertain a foreclosure claim; and (3) denied the motion to transfer to chancery.\n1. Appealable order.\nBefore discussing the main problem presented, we must deal with Haskins\u2019 assertion that the court\u2019s order is not appealable. We need only look to rule 2.(a)4., A. R. App. P., to see that any order which strikes a portion of a pleading is appealable.\nOn this point Haskins cites Davis v. General Motors Corp., 257 Ark. 983, 521 S.W. 2d 214 (1975), saying that, to be appealable, an order must affect a substantial right. While that case was decided long before the A. R. App. P. came into effect, it is consistent with rule 2.(a)2. which says an order is appealable if it effectively determines or discontinues the action. Here, the court, by striking the foreclosure claim against Haskins and dismissing it with respect to the third parties, refusing to transfer to equity and declaring its lack of jurisdiction in the matter has certainly effectively determined that claim. On oral argument Haskins asserted Toney had not been precluded from seeking a foreclosure in chancery, but Haskins cannot satisfactorily explain why Haskins would be precluded from asserting the election of remedies doctrine there if, as Haskins contends, it applies here.\nHaskins also cites McConnell and Son v. Sadie, 248 Ark. 1182, 455 S.W. 2d 880 (1970), saying an appeal will not be permitted where taken piecemeal resulting only in delay. We can find nothing here to show this appeal is taken for purposes of delay. As the foreclosure claim has been effectively dismissed, we are in no position to agree that this appeal is \u201cpiecemeal\u201d in the sense that term is used in the McConnell case.\n2. Timeliness of counterclaim.\nHaskins asserts the court was correct in striking the foreclosure claim because of Toney\u2019s delay in asserting it. This brings into focus the court\u2019s remark that the counterclaim was dismissed because it was not timely filed.\nApparently at the trial level, and certainly in their briefs and argument before this court, the parties disputed whether the court was correct in striking the counterclaim for foreclosure pursuant to the provisions of A. R. Civ. P. 15(a) which deals with amendments to pleadings.\nRule 15(a) is in no way applicable. Haskins argued that the filing of his suit for \u201csecret profits\u201d constituted an \u201canticipatory breach\u201d of the note, thus giving rise to the foreclosure counterclaim at that point. No authority is cited for that novel argument, and thus we need not consider it. Cherokee Carpet Mills, Inc. v. Worthen Bank and Trust Co., 262 Ark. 776, 561 S.W. 2d 310 (1978); Shinn v. First National Bank of Hope, Arkansas, 270 Ark. 774, 606 S.W. 2d 154 (Ark. App. 1980). We will, however, say that as a matter of common sense we fail to see how a request for cash damages for the face value of an unpaid note, but a note on which no payment was due, could be other than an affirmance of the obligation represented by the note itself. Even had Haskins sought rescission of the agreement and canc\u00e9llation of the instrument, we would not necessarily translate that into a default occurring at the time the complaint was filed.\nThe default occurred when Haskins did not make the payment due July 31, 1979, long after the initial pleadings which were filed in 1978. Thus, the right to foreclosure alleged matured after Toney had answered the complaint. Rule 13 (d) provides that such a claim may be filed as a supplemental pleading or may be asserted in a separate action. As Toney attempted to assert the foreclosure as a counterclaim, it must be considered a supplemental pleading to which rule 15(d) applies and not an amendment to which rule 15(a) would apply.\nRule 15(d) requires leave of court to file a supplemental pleading. Apparently no motion was made by Toney. In some circumstances we would have to say that, given the failure to make a motion to be permitted to file the supplemental pleading, the court should have stricken it, but not here. The parties and the court were apparently oblivious to the distinction between an amendment and a supplemental pleading, and no issue arose over the failure of Toney to seek the court\u2019s permission to file the pleading. Given these circumstances, we have no hesitancy in saying that had the court denied a motion to allow the pleading we would have considered that an abuse of his discretion. This is especially true in view of Haskins\u2019 claim, and the apparent agreement of the court, that Toney was barred from asserting foreclosure by the election of remedies doctrine. As mentioned above, an inevitable extension of argument is that Toney could not have sought foreclosure as a separate action in chancery.\nThe trial court\u2019s statement that the counterclaim was not \u201ctimely\u201d made no reference to any requirement in the rules stating it must be \u201ctimely,\u201d and we know of none except to the extent timeliness may play a part in the application of rule 13(d). The essence of rule 13(d) is that such a supplemental pleading should be permitted \u201cupon such terms as are just.\u201d Here it would most certainly have been \u201cunjust\u201d to have refused the pleading.\n3. Election of remedies.\nHaskins\u2019 contention here is, and the court\u2019s decision below was, that because Toney had elected to affirm and sue for damages at law on the note, he elected his remedy to the exclusion of his foreclosure alternative.\nOur main difficulty with this argument is in finding the juncture at which such election was made. Other than the delay in asserting the foreclosure, with which we have dealt above, the only fact cited by Haskins showing an election is Toney\u2019s request in his original answer for attorney\u2019s fees.\nIn Toney\u2019s original answer he defended the note and sought attorney\u2019s fees, but that was solely in response to Haskins\u2019 request for damages represented by the face value of the note as part of the \u201csecret profits\u201d allegedly obtained by Toney.\nAt no point in that pleading did Toney allege default on the note and seek acceleration and judgment for the full amount or any note payment. The telling reason is that he could not have done so, given that the note was not in default. As stated above, we know of no reason to say Toney was required to regard Haskins\u2019 suit as an anticipatory breach or default on the note. Had Toney prevailed, he might well have chosen to leave the note intact, continuing to demand the annual payments.\nThe election of remedies rule is not favored by the courts. Owens v. Bill and Tony\u2019s Liquor Store, 258 Ark. 887, 529 S.W. 2d 354 (1974). For it to be applied there must be concurrent, inconsistent remedies. Belding v. Whittington, 154 Ark. 561, 243 S.W. 808 (1922). Haskins\u2019 only serious allegation on this point is that Toney made the fatal election when he answered Haskins\u2019 original complaint. At that time there was really no remedy available to Toney as there had been no default, let alone concurrent remedies.\n4. Failure to seek permission to sue third parties.\nAs one of its reasons for dismissing Toney\u2019s third party complaint against the appellees, other than Haskins, who might have had an interest in the property subject to the foreclosure sought, the court cited that Toney had not complied with the requirement of A. R. Civ. P. 14(a) that a motion and notice be filed to bring in a third party if the defendant seeks to do more than ten days after filing an answer.\nWe need only point out that rule 14 deals with impleader by a defendant to a claim or counterclaim of a person or persons who \u201cmay be liable . . . for all or part of the plaintiff s [or counter claimant\u2019s] claim against him.\u201d That was not the purpose of bringing in these third party defendants to Toney\u2019s counterclaim. Rather, his complaints against them fit precisely the joinder provision of rule 19(a), and if the foreclosure claim had been permitted to stand, as it should have, the court would have been required to join these other appellees as defendants, given the \u201cfeasibility\u201d of joining them.\n5. Transfer to chancery.\nAlthough the action for \u201csecret profits\u201d could be characterized as a simple restitutionary action and thus one cognizable at law, as opposed to an equitable \u201caccounting,\u201d we agree that, as no argument has been made that the action to foreclose is one the circuit court should hear, and as it is clear the claims of the plaintiff and defendant are related and largely dependent on each other, the entire matter should be transferred to chancery pursuant to rule 18(b).\nReversed and remanded.\nSupplemental Opinion delivered December 10, 1980\nDavid Newbern, Judge.\nThe facts stated in paragraph two of the opinion were ascertained from exhibits filed with the pleadings. The statements are not in any way intended to be binding upon the trial court in any future proceedings.",
        "type": "majority",
        "author": "David Newbern, Judge. David Newbern, Judge."
      }
    ],
    "attorneys": [
      "Hoover, Jacobs & Storey, for appellant.",
      "Cearley, Gitchell, Mitchell A Bryant, for appellees."
    ],
    "corrections": "",
    "head_matter": "John D. TONEY, Sr. v. John T. HASKINS et al\nCA 80-222\n608 S.W. 2d 28\nCourt of Appeals of Arkansas\nOpinion delivered November 19, 1980\n[Supplemental opinion on denial of rehearing December 10, 1980.]\nHoover, Jacobs & Storey, for appellant.\nCearley, Gitchell, Mitchell A Bryant, for appellees."
  },
  "file_name": "0190-01",
  "first_page_order": 222,
  "last_page_order": 229
}